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Justification for Consideration


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I'm in search of documented authority (U.S.C. / FAR etc.) that would support the below statement:

"As a general rule, a CO does not need a contract clause in order to grant a request for a "no cost extension." But the CO must obtain consideration in return if the contractor is not contractually entitled to an extension." by @Vern Edwards

I am aware of FAR 50.103-2(a), however, is there something that can be cited when arguing in support of the government receiving considerations for a schedule change (proposed by the contractor that does not benefit the government)? The contractor insists consideration is not warranted, and short of terminating the contract, I am looking for ways to move the conversation forward. We do not want to simply ignore the request and leave dates on contract "as is" because we do not want to waive our right to pursue a termination if needed in the long run nor inadvertently render the contractual schedule of no effect.  Thank you in advance for your consideration in this matter!

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Is this a service contract? 

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@Seeking2Award, what didn’t you understand in reading this earlier thread at 

 

You said that the schedule extension would not benefit the government. This implies that there may be some. Additional cost, undesirable delays or other damages to the government. Does the KO simply want to waive the default and establish a new delivery date? Or does the KO want to obtain some consideration for extending the delivery date due to damages or other impact to the government for the delay?

EDIT: The OP posted the following  comment while I was posting this comment. Original. Post is resolved.

Edited by joel hoffman
Original question was resolved .
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7 hours ago, Don Mansfield said:

This one, too...

 

Thank you for this! It was really helpful. I was hoping for a FAR reference or a specific statute... for instance the Department of State has (or had) the following language in the Foreign Affairs Manual (FAM):

14 FAH-2 H-530 CONTRACT MODIFICATIONS : 14 FAH-2 H-531  GENERAL -

a. During the life of a contract, it may become necessary to alter the terms to incorporate new requirements or resolve problems that develop after contract award.  The contracting officer must prepare and issue a contract modification to modify the agreement.

b. The Code of Federal Regulations (CFR) Federal Acquisition Regulation (FAR) 48 CFR 43.102 provides that the only person authorized to modify a contract on behalf of the U.S. Government is a contracting officer acting within the scope of the contracting officer's authority.  The contracting officer’s representative (COR) has no authority to execute any contract modifications.  The COR may not obligate in any way the incurring of additional cost or change in scope by the U.S. Government, or terminate for any cause the contractor's right to proceed.

c.  Generally, there must be "consideration" whenever a contract is modified.  "Consideration" is the benefit each party confers upon the other for the modification.  No official of the U.S. Government may alter a contract to the prejudice of the U.S. Government unless the U.S. Government receives corresponding, tangible, contractual benefits.  There is no such thing as a "no-cost" extension to the contract period of performance unless the extension benefits the U.S. Government.  If the U.S. Government allows additional time for delivery, the "cost" to the U.S. Government is the right to delivery by the date originally agreed upon.  The law requires the contractor to provide consideration for the U.S. Government's giving up that right.

d. Modifications to a contract affect the interests, rights, and obligations of two independent parties, the U.S. Government and the contractor.  The responsibility of the contracting officer is to preserve the integrity of the relationship between these two parties.  The contracting officer reviews the action to determine whether it is consistent with the existing contract and to ensure that the equities of the existing relationship are preserved, and will be continued, when a modification is issued and negotiated.

The thread you offered provided me the reasoning/discussion I was looking for… and I can use it as a compass to work through the issue. Appreciate everyone for the responses!

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6 minutes ago, joel hoffman said:

@Seeking2Award, what didn’t you understand in reading this earlier thread at 

 

You said that the schedule extension would not benefit the government. This implies that there may be some. Additional cost, undesirable delays or other damages to the government. Does the KO simply want to waive the default and establish a new delivery date or obtain some consideration for extending the delivery date due to damages or other impact to the government for the delay?

Thanks for the response. I provided a response to this thread as feedback to @Don Mansfield. To answer your question directly, we will see how things play out (there may be political implications at play that are yet to be discovered), but this thread will certainly become a part of the discussion with the KO. 

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12 hours ago, Seeking2Award said:

I'm in search of documented authority (U.S.C. / FAR etc.) that would support the below statement:

"As a general rule, a CO does not need a contract clause in order to grant a request for a "no cost extension." But the CO must obtain consideration in return if the contractor is not contractually entitled to an extension." by @Vern Edwards

It shouldn’t be hard to verify that parties that enter into a contract are generally entitled to change it (e.g., mutual agreement). FAR 43.103(a)(3); See also, 2023 Contract Attorneys Deskbook, p. 21-6.

Regarding consideration and given your responses within this thread, you might want to submit an inquiry to your legal counsel. Consideration is a legal doctrine (contract law and common law). It’s engrained in FAR-based acquisitions and emphasized in various places (e.g., FAR 1.108(d)(3)). During my research, I learned that the consideration doctrine doesn’t act in isolation and is not always necessary. Again, coordination with legal counsel—based on your facts—is wise.

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4 minutes ago, Jamaal Valentine said:

It shouldn’t be hard to verify that parties that enter into a contract are generally entitled to change it (e.g., mutual agreement). FAR 43.103(a)(3); See also, 2023 Contract Attorneys Deskbook, p. 21-6.

Regarding consideration and given your responses within this thread, you might want to submit an inquiry to your legal counsel. Consideration is a legal doctrine (contract law and common law). It’s engrained in FAR-based acquisitions and emphasized in various places (e.g., FAR 1.108(d)(3)). During my research, I learned that the consideration doctrine doesn’t act in isolation and is not always necessary. Again, coordination with legal counsel—based on your facts—is wise.

Thanks for the response. I appreciate the reference to FAR 1.108. You state that the consideration doctrine is "engrained" in FAR-based acquisitions in various places. Outside of the FAR reference you provided can you point to any other specific places? It feels like the authority for this doctrine with regards to Federal Contracts is hazy. As far as it being "engrained" I would agree with this as far as culture and what people say in classes and debates... but in my lived experience it seems it is completely at the discretion of the KO involved... with many (most I've worked with) KOs electing to ignore consideration for the government altogether in most instances ... preferring to push forward on contract performance and not make waves.  

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1 hour ago, Seeking2Award said:

Outside of the FAR reference you provided can you point to any other specific places?

How about FAR 45.301 and 3.705(e).   I will not go further other than to remind you that you can easily search the FAR these days.

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1 hour ago, Seeking2Award said:

Outside of the FAR reference you provided can you point to any other specific places?

Sure, see FAR 42.202-2(a)(10). Now, you could easily use the FAR search function at acquisition.gov and go through the 389 results to find anything interesting or useful to you.

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8 hours ago, C Culham said:

How about FAR 45.301 and 3.705(e).   I will not go further other than to remind you that you can easily search the FAR these days.

FAR 45.301 is irrelevant to my inquiry as is 3.705 (e). I am aware that I can search the FAR. The reason I asked the question is that I was looking for specific information that I can utilize. The thread provided by Don did give me some of that. This does not, but I appreciate your efforts to help.  

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15 hours ago, Seeking2Award said:

I'm in search of documented authority (U.S.C. / FAR etc.)

Check out a treatise on contracting such as Corbin or Williston.  That should give you ample authority to support that proposition.  

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9 minutes ago, Jamaal Valentine said:

Sure, see FAR 42.202-2(a)(10). Now, you could easily use the FAR search function at acquisition.gov and go through the 389 results to find anything interesting or useful to you.

I wasn't sure what you were referencing here "42.202 Assignment of contract administration" as I did not see anything discussed that was relevant to my inquiry. However, I do appreciate the time you took to engage. I am aware of the search function, but what I am looking for cannot be found that way... which is why I asked the question here. The earlier FAR reference you provided is useful so thank you for that! 

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27 minutes ago, Seeking2Award said:

FAR 45.301 is irrelevant to my inquiry as is 3.705 (e).

Bluntly.  What?  You asked for "FAR References" that supported that the concept was ingrained in FAR.   It seems your want a magic bullet and you are not goingto get one in my view as it flat out depends in every instant case.   The magic of Federal contracting.  And I might add that is why in a general statement on my part, depending on case law as noted in the thread I provided earlier, does not get the matter of the concept of consideration.

Have a great day!

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23 minutes ago, Seeking2Award said:

I wasn't sure what you were referencing here "42.202 Assignment of contract administration" as I did not see anything discussed that was relevant to my inquiry.

 

2 hours ago, Seeking2Award said:

You state that the consideration doctrine is "engrained" in FAR-based acquisitions in various places. Outside of the FAR reference you provided can you point to any other specific places?  

This was the inquiry I responded to. I thought it was responsive. Others providing similar responses confirms my thinking. Nonetheless, I think I’ve reached my usefulness here. Good luck.

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14 minutes ago, C Culham said:

Bluntly.  What?  You asked for "FAR References" that supported that the concept was ingrained in FAR.   It seems your want a magic bullet and you are not goingto get one in my view as it flat out depends in every instant case.   The magic of Federal contracting.  And I might add that is why in a general statement on my part, depending on case law as noted in the thread I provided earlier, does not get the matter of the concept of consideration.

Have a great day!

My OP was looking for authority to support that "the CO must obtain consideration in return if the contractor is not contractually entitled to an extension." When it was said that the concept was engrained in the FAR, I asked for specific examples (all my questions on this thread are within the context of my original post). The further examples provided did not tie back to the original post which is why I stated they were not relevant to my inquiry. It was not personal nor meant to be a slight... and I am not fishing for a magic bullet. I was asking to see if there is a FAR reference or law I had missed along the way that would allow me to use the word "must" with confidence.  I appreciate what you all provided, and this thread has helped. Take care. 

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23 minutes ago, Jamaal Valentine said:

 

This was the inquiry I responded to. I thought it was responsive. Others providing similar responses confirms my thinking. Nonetheless, I think I’ve reached my usefulness here. Good luck.

I appreciate you chiming in, I was trying to tie back the additional FAR reference to the OP, but didn't see what made you cite it. If you can explain I would appreciate it, but if not I understand. Thank you for your time. 

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14 minutes ago, C Culham said:

Bluntly.  What?  You asked for "FAR References" that supported that the concept was ingrained in FAR.

I agree, Carl.

Also, it’s worth noting that the original inquiry was not asked in the beginners forum. Thus, I think it’s fair to make some assumptions when responding. Bob asked us to “be gentle with [our] responses” there.

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